The rising prices of almost everything have posed a challenge to the wallets and budgets of Americans for several months. While economists continue to debate the root causes of the recent inflation surge, more than a third of adults in the United States agree on who bears the most blame: President Joe Biden. In a survey conducted by The Balance, 35% of adults in the U.S. said President Biden bears the greatest responsibility for rising prices and inflation. But the president was not alone in receiving criticism in the survey, which was conducted in late June and early July. About one in five participants cited the pandemic as the biggest reason, followed by corporations (13%) and Congress (10%).
Among corporations, Americans hold gas companies most responsible for inflation
Among those who believe corporations are responsible for inflation, gas companies bear the brunt of the blame, with 27% of participants directly holding them accountable for high prices compared to other types of businesses like banks, grocery stores, and pharmacies.
Political divide over who to blame for inflation
Despite some bipartisan agreement, The Balance survey showed a strong political divide over who is to blame for high inflation. Three-quarters of Republicans and Republican-leaning participants said Biden is the main culprit, while 62% of Democratic and Democratic-leaning participants said the pandemic is the primary cause of high inflation.
Americans uncertain that the Federal Reserve will curb inflation
Americans are also divided over the role of the Federal Reserve in curbing inflation. More than a quarter of participants do not believe the Fed will succeed in reducing inflation. However, 39% of participants expressed confidence that the central bank will take action to lower inflation, with nearly the same percentage, 35%, saying they are unsure. Democrats are more likely to believe that the Fed will curb inflation (47%) compared to 33% of Republicans.
What is considered the truth about high inflation?
Overall, economists recognize two primary mechanisms behind rising prices: demand-pull inflation and cost-push inflation. Demand-pull inflation occurs when consumers have more money to spend, leading to higher prices as more dollars chase the same amount of goods. Cost-push inflation happens when producers are forced to raise their prices due to supply shortages, labor shortages, and rising production costs.
So, who is responsible for the rising prices of food, fuel, and rent? The answer is not simple, and experts disagree as well. Economists at the Federal Reserve Bank of New York indicated that both factors contributed. Supply chain constraints and labor shortages stemming from the pandemic caused prices to rise, and this pressure was linked to expansive monetary policies that increased demand from consumers by giving them more money to spend – think stimulus checks and tax credits during the pandemic. Federal Reserve analysts stated that 60% of the price increases were attributed to added stimulus (demand) and 40% were due to supply chain complexities (cost).
Other economists blame corporations that excessively profited – and made super profits – from inflation. However, others attribute it to the same psychological phenomenon of inflation, where companies raise prices and consumers are willing to spend more money, anticipating higher prices in the future.
In summary – no one is exactly sure what is causing high inflation, but there is no shortage of opinions.
Methodology
The Balance conducted a survey of 1,200 Americans from June 30 to July 9, 2022. The survey was conducted online via a questionnaire administered by individuals to participants from a market research vendor. To qualify, survey participants (18+) must manage their finances at least partially. Quotas were used to ensure national representation by gender, race/ethnicity, region, and generation, using estimates from the U.S. Census (2019 ACS) as a reference standard. Quotas were also used to match national representation for political affiliation using the Pew Research American Trends Panel (2022) as a reference standard.
Research and analysis by Amanda Morley
Source: https://www.thebalancemoney.com/one-third-of-us-adults-blame-biden-for-surging-inflation-6735922
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